Department of Labor Lowers Penalties for Small Employers

Revisions to the Department of Labor’s penalty and debt collection procedures lower penalties on small employers and are intended to help “minimize the burden on small businesses and increase prompt hazard abatement,” an OSHA news release states. The updated guidance applies to penalties issued from July 14, 2025, the effective date of the new policy, and to open investigations in which penalties have not yet been issued. The maximum penalty reduction level of 70 percent for small employers, which previously applied to businesses employing 10 or fewer workers, now applies to businesses with up to 25 employees. And employers who immediately take steps to address or correct hazards may now receive a “quick-fix” penalty reduction of 15 percent under the new guidelines.

Additional changes include expanded penalty reductions for employers that do not have a history of serious, willful, repeat, or failure-to-abate violations, and a 20-percent penalty reduction for “employers who have never been inspected by federal OSHA or an OSHA State Plan, as well as employers who have been inspected in the previous five years and had no serious, willful, or failure-to-abate violations,” according to the agency.

These new penalty guidelines “[make] it easier for small businesses to invest resources in compliance and hazard abatement,” OSHA says.

The chapter of OSHA’s Field Operations Manual on penalties and debt collection outlines these changes. For more information, see the agency’s news release.